Savings Group to mull compulsory KiwiSaver

Savings Group to mull compulsory KiwiSaver, different tax treatment

By Paul McBeth

Aug. 24 (BusinessDesk) – The government’s newly announced Savings Working Group will consider the benefits of compulsory KiwiSaver and changing the tax treatment on savings.

The group, headed up by Grant Thornton chairman Kerry McDonald, aims to give Finance Minister Bill English advice on how to stoke national savings, and will focus on government saving, tax on capital income, and the role of KiwiSaver. It will specifically look at the case for moving to a dual tax system, where labour and savings and investment income are taxed at different rates. The group hasn’t been told to focus on retirement savings.

“Increasing our national savings and investment levels is a critical issue for New Zealand, because of our heavy reliance on foreign capital,” English said in a statement. “This has produced high and rising debt to the rest of the world, which cannot continue.”

English said the group’s brief excludes New Zealand Superannuation and a broad tax on capital gains or land.

Along with McDonald, the group is made up of Capital Markets Research director Craig Ansley, Motu research fellow Andrew Coleman, columnist Mary Holm, central bank Assistant Governor John McDermott, PricewaterhouseCoopers partner Paul Mersi and BNZ head of research Stephen Toplis.

The group aims to prepare a draft report by the end of the year, and return to the government in January.

(BusinessDesk)

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